1/31/2007 @ 6:00AM

Information Super Traffic Jam

A new assessment from Deloitte & Touche predicts that global traffic will exceed the Internet’s capacity as soon as this year. Why? The rapid growth in the number of global Internet users, combined with the rise of online video services and the lack of investment in new infrastructure. If Deloitte’s predictions are accurate, the traffic on many Internet backbones could slow to a crawl this year absent substantial new infrastructure investments and deployment.

Uncertainty over potential network neutrality requirements is one of the major factors delaying necessary network upgrades. The proponents of such regulations are back on the offensive, heartened by sympathetic new Democratic majorities and the concession made by
AT&T
in its
BellSouth
acquisition. The Google/MoveOn.org coalition fighting for network neutrality mandates calls itself “Save the Internet.” But the Internet doesn’t need to be saved–it needs to be improved, expanded and bulked up. An attempt to “save” the Internet in its current state would be something akin to saving the telegraph from the telephone.

Robert Kahn and David Farber, the technologists known respectively as the father and grandfather of the Internet, have both been highly critical of network neutrality mandates. In a recent speech, Kahn pointed out that to incentivize innovation, network operators must be allowed to develop new technologies within their own networks first, something that network neutrality mandates could prevent. Farber has urged Congress not to enact network neutrality mandates that would prevent significant improvements to the Internet.

Without enormous new investments to upgrade the Internet’s infrastructure, download speeds could crawl to a standstill. It would be unfortunate if network neutrality proponents successfully saved the rapidly aging, straining Internet by freezing out the technological innovations and infrastructure investments that would enable next generation technologies to be developed and deployed.

The video-heavy, much vaunted Web 2.0 advances of the last couple of years were made possible at low prices to consumers because the speculative overbuilding during the bubble era created massive overcapacity that made bandwidth cheap and abundant. It’s now all being consumed.

One solution suggested by network operators is to prioritize traffic based on service tiers and use revenue from content providers in the premium tiers to subsidize the high costs of infrastructure deployment. The MoveOn.org crowd denounces this solution for creating Internet fast lanes and relegating everything else to the slow lane. But as the Deloitte report shows, the likely alternative is that there will be only slow lanes, potentially very slow lanes as soon as later this year. Call it the information super traffic jam.

Advanced networks cost billions of dollars to deploy and need to generate predictable revenue to make business sense. The infrastructure companies are unanimous in their belief that offering premium services with guaranteed bandwidth will be necessary for them to justify their investments. Quality-of-service issues alone are likely to require tiering, because in a world of finite bandwidth, people won’t want high-value services like video and voice if they can be degraded by the peer-to-peer applications of teenage neighbors.

Craig Moffett of Bernstein Research told the Senate Commerce Committee last year that any telecom company that made a major infrastructure investment under a network neutrality regime would see its stock nosedive. Moffett estimated that the bandwidth for an average TV viewer would cost carriers $112 per month. A high-definition TV viewer would cost $560. Unless the YouTubes and Joosts of the world are willing (and legally permitted) to pay some of those costs, the investments are unlikely to happen.

If network neutrality proponents have their way the Internet may be frozen in time, an information superhighway with Los Angeles-like traffic delays. The Internet doesnt need to be saved–it needs to keep getting better.